“This money is so dirty it had to be laundered five times—and it still stinks.” —Gov. Jerry Brown
The story line seemed more appropriate for a screenplay hatched from the fertile minds of Hollywood’s liberal brain trust—shadowy entities comprised of secret donors, hell-bent on warping the system to suit their right-wing agenda.
And yet, there it was, plastered above or just below the masthead of newspapers across the state: millions of dollars funneled through a maze of shell companies in order to help pass Proposition 32, an initiative meant to prevent unions from using employee wages for political causes. Republicans are traditionally oppositional to both labor management and its membership, and generally resist efforts to empower them. The bill failed to pass anyway.
Habitually resistant to tax increases, the Republicans had also earmarked this “dark money” to contest Proposition 30, a sales and income tax increase that would benefit educational funding, public safety, and address the state deficit. Proposition 30 did pass.
The charges ran against the precepts of American idealism—opportunity and equality.
One disgruntled observer of this electoral skullduggery was state Sen. Leland Yee, (D-San Francisco).
“Certainly Prop 30 and Prop 32 campaigns were affected, but fortunately the outcomes were not changed as a result,” he said.
As a first generation immigrant, Yee was weaned on stories of totalitarian rule in his native China by his expatriate parents. With this background, the San Francisco resident grew up regarding the American electoral process as sacred. Questions remain about the extent to which these latest developments may have affected this routine.
“It is unclear how many other elections have been decided as a result of this unethical campaigning,” Yee suggested.
To address this impropriety, Yee and his senatorial colleague, Ted Lieu (D-Torrance), have drafted and submitted Senate Bills 2 and 3, collectively known as the Sunshine in Campaigns Act.
Amid the hubbub of Barack Obama’s re-election hysteria, this charge of monetary impropriety was overshadowed, but watchdog groups like the California Fair Political Practices Commission committed their resources into uncovering the sources, principals, and methods behind this curious arrangement of campaign subterfuge (at this writing, these allegations have yet to be completely substantiated).
The immediate precedent to this latest political brouhaha may be the emergence of the Super PACs (political action committees) in the wake of the landmark Citizens United versus Federal Election Commission Supreme Court case of 2010.
Citizens United, the nonprofit in question, attempted to air commercials during the Democratic primaries, promoting a documentary critical of then-presidential candidate Hillary Clinton, which raised a heated Supreme Court debate over the relative merits of freedom of the press, First Amendment rights, the definition of campaign finance, and whether such a documentary might be considered a political advertisement. Citizens United settled on the notion that campaign financing laws limiting corporation and union spending were tantamount to infringing upon their free speech.
Groups classified as “nonprofit” are prohibited from direct contributions to individual political candidates, but free to spend unlimited sums to convince the voting public to choose a particular contender (or measure). This, in turn, set the stage for the debacle that emerged in November 2012.
Building upon the notion that corporations, like individuals, should be able to exercise freedom of speech by using their financial resources to support candidates or decrees of their choice. The U.S.
Supreme Court agreed.
This decision removed the previous prohibition that kept these corporations from using their treasury funds to advocate for a given contender or proposition, though they still cannot deal directly with the person or campaign apparatus in the quest for a given office.
In this instance, the involved parties operated within the law, but performed an intricate form of
sleight of hand to confuse the origins of their benefactors.
Americans for Responsible Leadership, the Arizona nonprofit of record that contributed $11 million toward the defeat of propositions 30 and 32 (measures featured in the election of a completely different state), had received these monies from another Arizona group, the Center to Protect Patient Rights, headed by Sean Noble, a Phoenix-based GOP (Grand Old Party) consultant long associated with the billionaire Koch brothers, a fixture in the Republican hierarchy.
The Center to Protect Patient Rights, in turn, apparently got its money from Americans for Job Security, a pro-Republican Virginia-based group (rumored to exist within a UPS drop box in the town of Alexandria) with a long history of opposition to liberal and moderate interests.
Lieu, a reserve lieutenant colonel and judge advocate general (JAG) prosecutor in the Air Force, was particularly offended.
“As alert voters were chagrined to learn, last-minute donations from what essentially were anonymous special interests was a blatant attempt to unfairly shape election results,” he said. “This must stop.”
The election over, the two lawmakers went into high gear in drafting a solution to this latest chicanery. “Transparency and disclosure are critical to a healthy democracy,” said Lieu.
Yee, in summing up the motivation behind the Sunshine Act explained: “SB 2 does several things in terms of disclosure of funds for TV and media ads, including disclosing the names of the top four donors in ads.”
The lawmakers aim to reduce the ambiguity that allows unscrupulous parties to wiggle around in a manner not intended by the original authors of the edicts.
The past controversies often arose from semantics, or what a donation is specifically designated to go for.
“This is a loophole that we hope to fix,” Lieu said. State Senate Bill 3 specifically aims to address this issue.
Yee elaborates: “SB 3 revises the definition of a contribution to a candidate or committee to include payments made by a donor who knows or has reason to know that payment (or funds with which the payment will be commingled) will be used to make a contribution or campaign expenditure.”
These tactics are by no means restricted to the Golden State. Iowa-based nonprofit American Future Fund, which advocates “conservative and free-market principles,” in recent months shifted its resources to blocking the nomination of Republican Chuck Hagel as secretary of defense (he was eventually confirmed), and stymieing Barack Obama’s efforts to implement a bipartisan composition in his administration.
The casual observer may, at this point, surmise a pattern developing. All of these episodes of electoral chicanery have involved Republicans and firms established by them to sway the process toward their own ends. Not to be outdone, the GOP has responded with its own countercharges.
In one scenario, the watchdog group Government Accountability Institute claimed that the campaign organ Obama for America (now called Organizing for Action) accepted donations from foreign and fictitious donors, including contributions from shady origins in the Middle East. Conservative entity Watchdog News Daily conducted a “sting” operation, wherein they submitted a $15 donation from “Osama bin Laden,” occupation “deceased terror chief,” residing at “Abbottabad, California” in an apparent attempt to discredit or embarrass the Obama campaign. Exposure of this minuscule payment would suggest the Obama apparatus was open to donations from even the most disreputable sources.
Their primary legitimate focus of criticism to date is Priorities USA, a PAC started by ex-Obama campaign members with the expressed goal of re-electing the president. As mentioned above, this group is barred from directly dealing with the official campaign (to minimize other possible incidents of malfeasance), so their resources were directed toward the production of advertising spots. As a 501(c) nonprofit, it is not obligated to reveal the source of its donations.
Lieu acknowledges that deep pockets alone do not guarantee success at the polling booth, citing liberal civil rights attorney Molly Munger (daughter of Warren Buffett’s business partner) and her ill-fated sponsorship (to the tune of $28 million) of Proposition 38, a tax measure designated to raise educational funding through tax increases. More prominently, Meg Whitman spent an estimated $144 million of her personal finances in an unsuccessful bid for governor against current officeholder Jerry Brown.
Weighing in on the tangible benefits of shoveling enormous sums into a political contest, Phillip Ung, policy advocate at the liberal nonprofit Common Cause, replied: “I can’t think of any specific election where an influx of money at the end of an election swayed the result. It usually has the opposite effect, especially if the source is shadowy and anonymous.”
The real concern seems to be the possibility of future corruption of the system. Ung notes: “there have been studies that have shown that 85-90 percent of electoral winners spent more money than their losing opponent.”
All the influence money can buy
The billionaire Koch brothers and the art of social severity
“We’re going to study what worked, what didn’t work, and improve our efforts in the future. We’re not going to roll over and play dead.”—David Koch in a post-election quote to Forbes magazine
This past presidential election, a disappointment for everyone within the conservative spectrum of American politics, motivated the brothers Koch, David and Charles, to reschedule their annual Palm Desert political strategy meeting normally held at the beginning of the year to April.
Attendees of this annual shindig held for the past decade tend to be, in the words of a press release from 2011, those who: ” … share a common belief that the current level of government spending in our nation is simply unsustainable.”
Attendees include Supreme Court justices, high-powered politicians, and the country’s wealthiest Republicans eager for the chance to merge with like-minded brethren and pool their resources towards specific agendas without having to disclose a cent of the pre-offered money.
In an email distributed among his inner circle explaining the change in venue, Charles Koch noted that ” … our goal of advancing a free and prosperous America is even more difficult than we envisioned.”
The Koch brothers received unwanted attention in the wake of the election with the disclosure that they were behind the $11 million anonymously donated to defeat the adoption California Proposition 32 (involving union payroll deductions earmarked for political contributions) and Proposition 30 (increasing income and sales taxes to provide funding for public education).
These specific funds were dispersed by the Sacramento-based Small Business Action Committee, which in turn served as a front for the Arizona-based Center to Protect Patient Rights, and Americans for Job Security. In short, the efforts to influence politics in California were orchestrated by outside groups from Arizona at the behest of a family of tycoons based in Wichita, Kan. The maze of convoluted nonprofits and other related organizations, apparently implemented to conceal the origins of its contributions and expenditures, prompted Gov. Jerry Brown to remark: “This money is so dirty it had to be laundered five times—and it still stinks.”
Aside from these activities, the Koch brothers have been determined to counter the advance of what is called the “political progressive movement,” starting with President Bill Clinton in the early 1990s, the ascent of his wife Hillary, and now President Barack Obama.
David Koch individually held a lavish fundraiser for Mitt Romney last summer at his palatial $18-million Southampton beachfront home, while their corporate entity allegedly tried to control the vote selection of its employees by issuing a thinly veiled threat in a memo to workers in the multibillion, multinational Georgia-Pacific Corp., just one of Koch Industries’ many subsidiaries.
The possibility of Democratic retaining the White House would mean a strain on American businesses, the communiqué said. This in turn would invoke the likelihood that “many of our more than 50,000 U.S. employees and contractors may suffer the consequences.”
The Koch brothers owe their fortune to the efforts of their father, MIT-trained chemical engineer Fred C. Koch, who was instrumental in developing the Russian gasoline refinery industry in the 1920s and ”30s. This in turn soured him on communism, a view that shaped the rest of his life, prompting him to help found the John Birch Society in 1958. Koch senior saw minorities as the gullible pawns of subversive agitators.
“The colored man looms large in the Communist plan to take over America,” he noted in the self-published tome, “A Businessman looks at Communism,” predicting that “… it will use the colored people by getting a vicious race war started.”
A major instrument in accomplishing these despicable goals, in his opinion, was public welfare and progressive notions like Social Security.
The petroleum refining techniques developed by their father left his boys a tidy fortune at his death in 1967, and the brothers own diligent efforts have enabled them to amass personal fortunes, by conservative estimate easily surpassing $50 billion in net worth.
Koch Industries oversees such common household products as “Brawny” paper towels, “Angel Soft” toilet paper, and “Dixie” paper cups. In addition, it maintains a vast oil pipeline system throughout North America, and fertilizer manufacturers and other agricultural entities across the globe.